UK-based Cineworld Group’s ‘first day’ relief application has been approved, meaning the company can restructure for the longer term.
A US bankruptcy court has approved Cineworld’s application for ‘first day’ relief, meaning the embattled cinema chain now has access to hundreds of millions of dollars with which to restructure. The blockbuster drought over the past couple of months has hit Cineworld hard, perhaps even harder than its competitors due to aggressive expansion over the past few years which has seen the group take on lots of debt en route to becoming the second-largest cinema chain in the world.
The ruling certainly smoothes out the imminent future for Cineworld, but with the theatrical landscape still shifting and industry titans like ex-Disney boss Bob Iger predicting that cinemas will never recover, the group’s future is by no means certain. Cineworld will have to box very cleverly to restructure the company to meet the demands of a market that may well be volatile for years to come.
Cineworld has over 9000 screens globally and the impact of those screens disappearing would be felt keenly indeed. However, today’s ruling guarantees the short-term future of the company. In the midst of these bankruptcy processes, the group has announced that “Cineworld and its brands around the world – including Regal, Cinema City, Picturehouse and Yes Planet – are continuing to welcome moviegoers to cinemas as usual, which will not change during the Chapter 11 cases.” Also, “the group will also continue to honour the terms of all existing customer membership programs, including Regal Unlimited and Regal Crown Club in the US and Cineworld Unlimited in the UK.”
Business as usual then, it seems. However, the way in which the company acts in the next couple of years will be vital towards building a more secure future for itself and its 30,000 employees. We’ll bring you more updates on this one as we hear it.
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